HC Deb 16 May 2002 vol 385 cc804-5W
Mr. Steen

To ask the Chancellor of the Exchequer what the estimated additional cost is to(a) Plymouth city council, (b) South Hams district council, (c) Devon county council and (d) Torbay unitary authority in the next financial year as a result of the increase in employer's national insurance contributions announced in the Budget; and what provision will be made to cover the additional costs which will be incurred. [56291]

Dawn Primarolo

It is estimated that the changes to employer NICs announced in the Budget will add around 0.7 per cent. to pay costs on average next year. The cost to the public services will be just over £l1 billion which compares with a planned rise in spending on public services of nearly £20 billion. The changes will help to fund improvements to public services and a real terms increase in spending on health over the next five years of over 40 per cent.

I regret that it is not possible to provide reliable sub-regional estimates for the national insurance changes within the disproportionate cost limits.

Mr. Evans

To ask the Chancellor of the Exchequer (1) what he estimates to be the extra revenue generated for the Treasury due to the rise in employer national insurance rates for companies employing fewer than 50 people in each of the next four years; [56173]

(2) what he estimates to be the extra tax revenue generated in the first year by the rise in national insurance employer contributions to companies employing fewer than (a) 10 and (b) 20 people. [56691]

Dawn Primarolo

I regret that it would be possible to provide an estimate only at disproportionate cost.

Mr. Webb

To ask the Chancellor of the Exchequer if he will set out the basis for the assessment made in para 2.28 of the Taylor report "The Modernisation of Britain's Tax and Benefit System: Number Two" regarding the under-contribution to the NI Fund by the self-employed; what his latest estimate is of that under-contribution; if he will undertake a similar comparison between the contributions paid by married woman at the reduced rate and the benefits to which such women are entitled; and if he will make a statement. [57147]

Ruth Kelly

The latest estimate of the value of the reduction in contributions by the self-employed which is not matched by reduced benefit entitlement is in Inland Revenue Statistics table 1.5, on the Inland Revenue website (www.inlandrevenue.gov.uk/stats/tax_expenditures_g_t05_1.htm).

The value is calculated by estimating the total employee and employer national insurance contributions which would be paid by the self-employed if they were to be subject to Class 1 contributions instead, and comparing this with the estimated total Class 2 and Class 4 contributions actually paid by the self-employed. An adjustment is made to allow for the fact that the self-employed are not eligible for certain contributory benefits, such as contribution-based jobseeker's allowance and the state second pension (or SERPS prior to April 2002).

If a similar calculation was performed for married women who have opted to pay national insurance contributions at the reduced rate it would not show any under-contribution.